California
Newsom’s latest insurance move could help Californians avoid cancelled policies — but they’ll have to pay
As some Californians continue scrambling for ways to affordably insure their homes, Gov. Gavin Newsom on Friday announced a push to expedite how quickly insurance companies can increase rates.
Speedier approvals for rate hikes is one of the key reforms insurers say is necessary for them to stay afloat amid a growing number of costly claims in the Golden State, especially tied to recent wildfires and other mounting costs of climate change.
Newsom said he is drafting a “trailer bill” that could cut the current approval process down to 60 days — legislation he hopes will quell an exodus of insurers bailing their business out of California and soothe residents’ financial anxieties around canceled policies.
The current process allows the Department of Insurance up to 84 days to approve filings for insurance rate increases, but that timeline can take substantially longer if a public hearing is requested by consumer advocates or other groups.
“We need to stabilize this market,” Newsom said during a Friday press conference about his revised budget proposal. “We need to send the right signals, we need to move.”
While this change may temporarily usher in more expensive bills for consumers, proponents argue the changes will make home insurance more available. In turn, more options may also allow residents to avoid taking their chances with California’s “FAIR Plan,” the state’s “insurer of last resort,” which offers exorbitant premiums compared to regular insurance, and is also inching towards insolvency.
Denni Ritter, the American Property Casualty Insurance Association’s department vice president for state government relations, praised the news about expedited approvals Friday afternoon.
“Expediting the rate review process is a vital component to addressing California’s insurance crisis,” Ritter said in a statement. “We look forward to working with the Administration, Legislature and Department of Insurance on this crucial reform and other reforms necessary to fix our broken regulatory system and increase the availability of insurance for California homeowners, drivers, and businesses.”
The governor said he opted to work with state lawmakers on this “trailer bill,” rather than pursue an executive order to move the process along.
California’s Insurance Commissioner, Ricardo Lara, started working with Newsom last fall to modernize and overhaul three decades of state’s regulations, including efforts to allow insurance companies to use catastrophe models to set rates, as well as bill consumers for the costs of reinsurance, which is insurance for insurers.
Lara said that ongoing work, however, isn’t expected to materialize until December.
That timeline isn’t fast enough in the governor’s eyes. If Newsom’s bill is passed within the state’s budget for 2024-25, it may take effect as early as July 1.
“(Lara’s) team is working their tails off, I know how concerned the legislature is on this,” Newsom said. “But December? I don’t think we have that much time.”
Rather than push back on Newsom’s announcement of his new bill, Lara thanked the governor’s support of his own effort, which has been dubbed the Sustainable Insurance Strategy.
“Newsom is right: time is of the essence,” Lara posted to X, formerly Twitter, on Friday. “Our partnership with the Governor and Legislature are essential to stabilizing our market. We’ve taken significant steps forward, but there is more to do.”
California
Springs Fire in southern California reaches 45% containment as evacuations continue
RIVERSIDE, Calif. — Crews were making progress Saturday battling a fast-growing and smoky wildfire in southern California that broke out Friday morning, prompting mandatory evacuations and warnings.
Now encompassing roughly 6.3 square miles (about 16 square kilometers) east of Moreno Valley in Riverside County, the Springs Fire was 45% percent contained on Saturday, according to a state website. It was 25% contained on Friday.
More than a dozen zones in the county remained under mandatory evacuation orders or evacuation warnings, while six have been dropped. It was not immediately known how many households were affected by the orders.
Firefighters were battling strong winds. The National Weather Service issued an advisory for 15 mph to 20 mph winds, with gusts up to 45 mph, into Saturday afternoon. An air quality alert has also been issued for harmful fine particle pollution levels due to wildfire smoke.
Hundreds of people have been battling the blaze using helicopters, engines and water tenders. It’s located in a populated unincorporated part of Riverside County, in a recreational area near the city of Moreno Valley, which has a population of roughly 200,000. The city is 10 miles southeast of Riverside and 64 miles east of Los Angeles.
California
A fast-growing wildfire in windy Southern California triggers evacuations
RIVERSIDE, Calif. — A smoky and fast-growing wildfire Friday in windy Southern California has prompted multiple evacuation orders and warnings.
The Springs Fire broke out at around 11 a.m. Friday and by the evening had grown to about 5.47 square miles (14.17 square kilometers), with fire crews starting to contain it. The cause of the fire east of Moreno Valley in Riverside County is under investigation. It was not immediately known how many households are under evacuation warnings or orders.
The fire was burning in a populated — but not densely so — unincorporated part of Riverside County, in a recreational area near the city of Moreno Valley, which has a population of roughly 200,000. The city is 10 miles (16 kilometers) southeast of Riverside and 64 miles (103 kilometers) east of Los Angeles.
“It’s windy out there,” said Maggie Cline De La Rosa, a public information officer for the California Department of Forestry and Fire Protection in Riverside County.
Alex Izaguirre, a spokesperson for the Cal Fire Riverside County, said the wind is “spreading the smoke,” prompting concerned calls from residents in neighboring cities who can see and smell the smoke.
The National Weather Service issued a wind advisory for San Bernardino and Riverside County valleys through Saturday afternoon, with gusts of up to 50 mph (80 kph) expected.
“Tree limbs could be blown down and a few power outages may result,” the advisory read.
California
Doctors, nurses arrested in Southern California health care fraud investigation
LOS ANGELES — The U.S. Department of Justice on Thursday announced what they called a major health care fraud takedown throughout Southern California, which included the arrest of doctors and nurses.
First Assistant U.S. Attorney Bill Essayli was joined during a press conference by several law enforcement agencies including the FBI, and Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services.
They said they served a series of search and arrest warrants throughout the region, from Covina to Lakewood in Los Angeles County. Eight people were arrested and more than a dozen are being charged for suspected health fraud.
They also mentioned fraudulent hospice care.
“These defendants recruited beneficiaries who were not terminally ill, and paid them to pose as patients receiving hospice care. Medicare then paid millions of dollars – hundreds of millions of dollars – on false and fraudulent claims submitted by fraudsters,” said Essayli.
Among those arrested were a Covina couple. Prosecutors said 66-year-old psychologist Gladwin Gill and his wife, Amelou Gill, a registered nurse, operated a fraudulent hospice business out of Glendale.
“This particular hospice submitted more than $5.2 million in fraudulent claims, and Medicare actually paid out more than $4 million,” Essayli said.
Gill’s attorney told our sister station, ABC7 Eyewitness News in Los Angeles, he denies the allegations and looks forward to his day in court.
Oz announced a broader review of hospice providers in the state.
“We’re going to review every single hospice in California to make sure that they’re all appropriate, and we hope to do that expeditiously. We’ll do it this year,” Oz said.
During the news conference, federal authorities were questioned about a video California Gov. Gavin Newsom said in January his office was reviewing. In that video, Oz, who is Turkish American, was shown standing in front of an Armenian-owned bakery in Van Nuys while alleging widespread fraud in the area.
Essayli confirmed that none of the defendants named Thursday were connected to that video. Oz responded to outcry that his accusations, which the business owner denounced as false, were discriminatory.
“I was stating the facts as they’ve been explained to me, and we have a lot of evidence of where the fraud is, just looking at the numbers,” Oz said.
Oz did not provide any evidence against a specific business in connection to that video. He suggested that half of Los Angeles County hospice care facilities are fraudulent, pointing to survival percentages as evidence.
“World experts at CMS say if you’ve got 100% or near survival, certainly if you’ve got a survival over 50% for population that’s supposed to have passed in six months, you’ve got a problem,” he said.
Newsom responded to accusations that California had not done enough to address hospice fraud, saying in part, “The Trump Administration – home to the biggest fraudsters on Earth – is trying to blame California for issues with THEIR federal programs.”
His press office said the state has taken action for years, including suspending more than 280 licenses and banning new ones.
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